Leading Stocks - Selling Continues

Last week stocks experienced a strong advance followed by mostly selling.  Tuesday's bullish gain did see strong action by leading stocks.  Informatica (INFA), W.R. Grace (GRA) and Brightpoint Education (BPI) all marked new highs on strong volume.

But the enthusiasm was short lived.  Wednesday's action undermined the prior day's move and put stocks back into a correction.  The S&P 500, Nasdaq, and NYSE were each down 2.3% on the day.  The IBD 50 was down only slightly more at 2.5%.

Thursday's action was mixed but leading stocks outperformed.  The Nasdaq was up 0.1%, the S&P 500 down 0.1% but the IBD 50 gained 0.5%.  Some stocks, like 2010 IPO Accretive Health (AH), saw constructive trade on the day.

Broad stocks indexes closed last week by falling below recent lows.  Weak jobs data aggravated an already fragile environment.  Leading stocks were mostly quiet on Friday.

The selling continued on Monday as the global economic recovery may be showing signs of fatigue.  Supply disruptions caused by the tsunami in Japan are being blamed for some of the slowdown in manufacturing but other problems persist in real estate and employment.  Continued debt challenges in parts of the global economy only complicate the situation.

More leading stocks are starting to come under pressure, potentially a negative development for the broader market.  The Nasdaq is struggling to hold onto its gain, up 1.87% for the year.  So far the Nasdaq is down just under 6% from highs reached in April.